JPMorgan upgrades blockchain activity
JPMorgan is trying to get ahead of the game. The bank announced yesterday that its stablecoin, called JPMCoin, had been used for the first time by a tech giant, whose name it did not reveal, for cross-board payments. Other clients “are being on-boarded,” Takis Georgakopoulos, global head of wholesale payments at JPMorgan, told CNBC.
The investment bank created the digital coin one year ago for instantaneous settlement of transactions between commercial clients for wholesale payments. In addition to this project, the bank announced it had created a department dedicated to blockchain and digital currencies, called “Onyx” in which 100 persons will work full time.
“We are launching Onyx because we believe we are shifting to a period of commercialization of those technologies, moving from research and development to something that can become a real business,” Georgakopoulos said.
Onyx is not JP Morgan’s first shot at the blockchain. In 2017, it had launched a payment-processing network using blockchain, called Interbank information network (IIN), which aimed to minimise friction in international payments processes. With Onyx, JP Morgan will continue to move forward in this area, processing more than $6,000bn daily in more than 100 countries.
In addition to the issue of cross-border payments, Onyx will work on other sticking points, such as paper cheque processing. “We’re talking about hundreds of millions of checks being sent,” Georgakopoulos said. “Using a version of blockchain with the participants being the main issuers of checks and the main operators of lockboxes, it’s possible we can save 75% of the total cost for the industry today, and make checks available in a matter of minutes as opposed to days.”
From 2017 to 2020, JP Morgan changed its views on cryptocurrencies. In 2017, bitcoin had been called a “fraud” by JPMorgan’s chairman and CEO, Jamie Dimon, but a recent JPMorgan research note explained that bitcoin could rival gold as an alternative currency.